October 20, 2011 — Health economics may not be the most glamorous specialty in public health, Dean for Academic Affairs David Hunter told an HSPH audience gathered to celebrate health economist Meredith B. Rosenthal’s promotion to full professor, but work such as Rosenthal’s that addresses health care costs, quality, and affordability meets a major global need. At an October 11, 2011 symposium in Rosenthal’s honor, Hunter joined Arnold Epstein, chair of the Department of Health Policy and Management, and Harvard Medical School Prof. Richard Frank in praising Rosenthal as a research, policy translation, and teaching “triple threat” who works on important problems that make a real difference in people’s lives.

Epstein noted that Rosenthal was quick to recognize the emergence of pay-for-performance (P4P) programs, which aim to improve the value of health care by paying providers based on quality and cost-saving measures. She has gone on to become a national thought leader in this area through her work evaluating the cost-effectiveness of these plans.

“Meredith doesn’t see things coming from a block away, she sees things from four miles away,” said Epstein, who recalled working with Rosenthal when she was a PhD student. “It was clear to me then that she was a terrific scholar and I have admired her ever since,” he said.

Frank, a mentor and colleague of Rosenthal recently returned from serving for two years as Deputy Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services in the Office for Disability, Aging, and Long-Term Care Policy, said that the people a researcher trains and mentors are his or her most lasting legacy. After praising Rosenthal’s accomplishments, he discussed the findings of her P4P research and how it can provide a model for other cost-effectiveness research.

Rosenthal found that P4P did not necessarily result in improvements in quality. Pay-for-performance plans in the United States typically compensate providers on only five measures of quality, ignoring many other aspects of performance. Evidence suggests that in some cases quality slips in these unrewarded areas as providers focus on improving performance in the measures that help their bottom line, Frank said. U.S. providers benefitting the most from P4P plans were those already close to the baseline quality standards. Underperforming providers were too far behind to catch up to the baseline and the top-performing providers had no incentive to get better than they already were.

Frank added that methods Rosenthal used in her work to examine the idea of paying for quality improvements could be used to evaluate another emerging trend in policy circles: social impact bonds. The bonds, currently being experimented with in some communities are intended to relieve strain on public budgets by encouraging private investment in interventions in areas such as recidivism among former convicts and housing for the chronically homeless. If certain performance indicators are reached, the government shares the cost savings with investors. Social impact bonds seems like a promising idea, Frank said, but now he proposes that researchers should be asking the same questions Rosenthal posed around P4P: Will they work? Change behavior? Be cost-effective? What are the risks?

Rosenthal offered closing remarks and thanked Epstein and the rest of the department’s senior faculty for “having my back” during the difficult tenure process. “It’s nice to be on the other end of that tunnel,” she said.